In this week\u2019s Steady Investor, we’re spotlighting key market updates that every investor should keep an eye on, such as:<\/p>\n\n\n\n
\u2022 Hiring and wages are up
\u2022 Fed projects just one cut this year
\u2022 Americans have a positive outlook on the economy<\/p>\n\n\n\n
Jobs Up, Inflation Down<\/strong> \u2013 The U.S. Labor Department reported May jobs data last week and consumer price index (CPI) data this week. Both reports delivered positive news. In the U.S. labor market, U.S. jobs growth widely exceeded expectations in May, with 272,000 new jobs reported. Economists were expecting less than 200,000 jobs. Average hourly earnings also rose 4.1% year-over-year, which as we\u2019ll detail below, was nicely above the annual CPI inflation rate of 3.3%. This gap between earnings growth and the inflation rate signals that \u2018real wages\u2019 are on the rise for U.S. consumers, which is arguably good for spending and good for the economy. The unemployment rate ticked up to 4% in May, higher than April\u2019s 3.9%, as more unemployed workers came off the sidelines.1<\/sup> Even still, the unemployment rate has been at or below 4% for 30 months now, which the U.S. economy hasn\u2019t experienced since the 1960s. On the inflation front, the Labor Department reported that CPI rose 3.3% year-over-year, an improvement from April\u2019s 3.4% print. U.S. households paid less for transportation, some retail goods, gas, and also saw some relief from rising medical care prices. On a month-over-month basis, prices rose 0.2% in May, which was the lowest monthly reading since July 2023. This CPI report followed a positive report from the Fed\u2019s preferred inflation gauge, the PCE price index, and it arguably takes the pressure off the Fed to keep monetary policy overly restrictive. In the news, the futures markets priced-in a 70% chance of two rate cuts in 2024, up from 52% before the CPI report was released.2<\/sup><\/p>\n\n\n\n Maximize Your Retirement Savings \u2013 Here\u2019s How!<\/a><\/span><\/strong><\/p>\n\n\n\n Retirement means living the life you want, in the place you want, with activities you enjoy. But you also want to make sure your money lasts, and that means having a strategy for retirement spending.<\/p>\n\n\n\n Our free guide, 4 Strategies for Spending Money in Retirement3<\/sup><\/a><\/em><\/span><\/strong> offers strategies to help ensure your retirement nest egg lasts as long as possible. You\u2019ll also get insight on:<\/p>\n\n\n\n \u2022 Spending 101: Understanding tax buckets If you have $500,000 or more to invest, download our guide 4 Strategies for Spending Money in Retirement.2<\/sup><\/em> Simply click on the link below to get your copy today!<\/p>\n\n\n\n Download Zacks Guide<\/a><\/span>, 4 Strategies for Spending Money in Retirement3<\/sup><\/span><\/a><\/em><\/strong><\/p>\n\n\n\n Fed Holds Rates Steady and Projects One Rate Cut in 2024<\/strong> \u2013 In the second half of 2023, Fed officials were increasingly encouraged by inflation\u2019s progress, which had market participants forecasting a few rate cuts in 2024. But then economic growth accelerated in the second half of last year, and Q1 2024 inflation readings came in hotter-than-expected. Prior to March\u2019s standout higher-than-expected CPI print, a narrow majority of Fed officials were projecting three cuts in 2024. But March and April\u2019s CPI data altered that calculus and the prospect of rate cuts diminished further and further. At the June meeting, which just took place this week, the Fed held rates steady at a range between 5.25% and 5.5%. Eleven of nineteen policymakers projected no more than one rate cut in 2024, with four officials signaling no cuts were likely in the year. The remaining eight Fed officials kept the possibility of two rate cuts open for 2024. The Fed will meet four more times in 2024, in July, September, November, and December. Whether or not a rate cut happens will all depend on CPI and the PCE price index readings between now and those meetings.4<\/sup><\/p>\n\n\n\n American Households Starting to Feel Better About Their Finances and the Economy<\/strong> \u2013 For the better part of the past year, many Americans have been feeling pretty lousy about their finances and the economy. In fact, according to a Guardian\/Harris poll, 56% of respondents thought the U.S. economy was in a recession, which is the opposite of the economy\u2019s trajectory over the past two quarters. But recent data from the New York Fed suggests sentiment is turning around, even if just slightly. According to the NY Fed\u2019s May Survey of Consumer Expectations, 78.1% of respondents expected to be better off financially in the next year, the highest reading since June 2021. Respondents put a 40.5% chance that the stock market would also keep going up in the next twelve months, which is the most optimistic they\u2019ve been since May 2021. Inflation expectations also fell. One potential reason behind the rosier outlook for the U.S. economy is that household net worth reached a new record of $160.8 trillion in Q1 2024, up 2.9% from Q4 of last year.5<\/sup><\/p>\n\n\n\n
\u2022 The 4% Rule
\u2022 Dynamic spending with the 5% rule
\u2022 And more\u2026<\/p>\n\n\n\n